Editing Darien scheme (section)

==Origins==
The late 17th century was a difficult period for Scotland, as it was for much of Europe; the years 1695-97 saw [[Great Famine of 1695–1697|catastrophic famine]] in present-day Estonia, Finland, Latvia, Norway and Sweden, plus an estimated two million deaths in France and Northern Italy.<ref>{{cite journal|last1=de Vries|first1=Jan|title=The Economic Crisis of the 17th Century|journal=Journal of Interdisciplinary Studies|date=2009|volume=40|issue=2|pages=151–194|url=https://warwick.ac.uk/fac/arts/history/ghcc/event/events/40_2_de-vriesjih2009.pdf|access-date=7 April 2018}}</ref> The 1690s were Scotland's coldest decade in the past 750 years as documented in [[dendrochronology|tree ring records]].<ref>{{cite journal |title=Complexity in crisis: The volcanic cold pulse of the 1690s and the consequences of Scotland's failure to cope |journal=Journal of Volcanology and Geothermal Research |date=1 January 2020 |volume=389 |pages=106746 |doi=10.1016/j.jvolgeores.2019.106746 |language=en |issn=0377-0273|doi-access=free |last1=d'Arrigo |first1=Rosanne |author-link1=Rosanne D'Arrigo|last2=Klinger |first2=Patrick |last3=Newfield |first3=Timothy |last4=Rydval |first4=Miloš |last5=Wilson |first5=Rob |bibcode=2020JVGR..38906746D |hdl=10023/21075 |hdl-access=free }}</ref><ref>{{cite news |last1=Sima |first1=Richard |title=How the Cold Climate Shaped Scotland's Political Climate |url=https://eos.org/articles/how-the-cold-climate-shaped-scotlands-political-climate |work=Eos |date=2020-02-04}}</ref>

Scotland's economy was relatively small, its range of exports was limited, and it was in a weak position in relation to England, its powerful neighbour (with which it was in [[Union of the Crowns|personal ]] but not yet  [[political union]]). In an era of economic rivalry in Europe, Scotland was incapable of protecting itself from the effects of English competition and legislation.<ref name="ReferenceA">Prebble, ''Darien: The Scottish Dream''.</ref> The kingdom had no reciprocal [[export|export trade]] and its once-thriving industries such as [[shipbuilding]] were in deep decline; goods that were in demand had to be bought from England for [[pound sterling|sterling]]. Moreover, the [[Navigation Acts]] further increased economic dependence on England by limiting Scotland's shipping, and the [[Royal Scots Navy]] was relatively small.<ref name="ReferenceA"/>  Though the unusual cold affected much of the Northern Hemisphere, Scotland suffered disproportionately and lost 10-15% of its entire population, possibly due to its political isolation.<ref name="eos.org">{{cite news |last1=Sima |first1=Richard |title=How the Cold Climate Shaped Scotland's Political Climate |url=https://eos.org/articles/how-the-cold-climate-shaped-scotlands-political-climate |work=Eos}}</ref>  A series of domestic conflicts, including the 1639–51 [[Wars of the Three Kingdoms]] and unrest related to religious differences between 1670-1690 exhausted the people and diminished their resources. The so-called "[[seven ill years]]" of the 1690s saw widespread crop failures and famine, while Scotland's deteriorating economic position led to calls for a political or customs union with England. However, the stronger feeling among Scots was that the country should become a great mercantile and colonial power like England.<ref name="ReferenceA"/>

In response, several solutions were enacted by the [[Parliament of Scotland]]: in 1695 the [[Bank of Scotland]] was established; the [[Education Act 1696|Act for the Settling of Schools]] created a parish-based system of [[State school|public education]] throughout Scotland; and the [[Company of Scotland]] was chartered with [[Capital (economics)|capital]] to be raised by [[ Subscription (finance) |public subscription]] to trade with "Africa and the Indies".<ref name="Prebble, The Darien Disaster">Prebble, ''The Darien Disaster''.</ref>
[[File:NMSDarienChest.jpg|alt=|thumb|This chest was used to store money and documents associated with the [[Company of Scotland]], a trading company set up in 1695 with the power to establish colonies.<ref>{{Cite web|url=https://www.nms.ac.uk/explore-our-collections/stories/scottish-history-and-archaeology/darien-chest/|title=Darien chest|last1=History|first1=Scottish|last2=read|first2=Archaeology 2 min|website=National Museums Scotland|language=en|access-date=2019-10-15}}</ref>]]
In the face of opposition by English commercial interests, the Company of Scotland raised subscriptions in [[Amsterdam]], Hamburg and London for the scheme.<ref>Prebble, ''The Darien Disaster'', pp. 84–90.</ref> For his part, [[William III of England|King William II of Scotland and III of England]] had given only lukewarm support to the whole Scottish colonial endeavour.{{refn|On signalling his approval for the creation of the Company of Scotland, the King declared before Parliament: "I have been ill-served in Scotland, but I hope some remedies may be found to prevent the inconveniences which may arise from this Act."<ref>Prebble, ''The Darien Disaster'', p. 48.</ref>|group=lower-alpha}} England was at war with France and hence did not want to offend Spain, which claimed the territory as part of [[New Kingdom of Granada|New Granada]].<ref name="Insh,p.x">Insh, ''Papers'', p. x.</ref>

One reason for English opposition to the Scheme was the then prevalent economic theory of [[mercantilism]], a concept as widespread and accepted then as capitalism is today. Modern economics generally assumes a constantly growing market but mercantilism viewed it as static; that meant increasing one's market share required taking it from someone else.<ref>{{cite web|last1=Rothbard|first1=Murray|title=Mercantilism as the Economic Side of Absolutism|url=https://mises.org/library/mercantilism-economic-side-absolutism|website=Mises.org|date=23 April 2010|publisher=Good summary of the concept|access-date=7 April 2018}}</ref> This meant the Darien Scheme was not simply competition but an active threat to English merchants.

England was also under pressure from the London-based [[East India Company]] (EIC), who were keen to maintain their monopoly over English [[international trade|foreign trade]].<ref name="Insh,p.x"/> It therefore forced the English and Dutch investors to withdraw. Next, the EIC threatened legal action on the grounds that the Scots had no authority from the king to raise funds outside the English realm, and obliged the promoters to refund subscriptions to the Hamburg investors. This left no source of finance but Scotland itself.<ref name="Prebble, The Darien Disaster"/> Returning to [[Edinburgh]], the Company of Scotland for Trading to Africa raised £400,000 sterling in a few weeks (equivalent to roughly £{{Formatprice|{{Inflation|UK|400000|1698|r=-6}}}} today),{{Inflation-fn|UK|group=lower-alpha}} with investments from every level of society, and totalling about a fifth of the wealth of Scotland.<ref name="Carroll">Carroll, "The Sorry Story&thinsp;..."</ref><ref>Hidalgo, "To Get Rich For Our Homeland".</ref> It was, for Scotland, a massive amount of capital.<ref name="Prebble, p.90">Prebble, ''Darien: The Scottish Dream'', p. 90.</ref>

Scottish-born trader and financier [[William Paterson (banker)|William Paterson]] had long promoted a plan for a colony on the [[Isthmus of Panama]]. Essentially the intention was to tame, occupy and administer the land of the [[Darién Gap]], later known to be virtually untraversable.<ref>{{cite web| title=The Darién Scheme | website=Daniel Crouch Rare Books| url=https://www.crouchrarebooks.com/discover/featured-items/the-darien-scheme | access-date=9 March 2023}}</ref> The colony was to be situated on a gateway between the Atlantic and Pacific oceans permitting trade between them&nbsp;– the same principle which, much later, led to the construction of the [[Panama Railroad]], and then the [[Panama Canal]]. Paterson was instrumental in getting the company off the ground in London. He had failed to interest several European countries in his project but, in the aftermath of the English reaction to the company, he was able to get a hearing for his ideas.<ref name="Prebble, p.90"/> The [[James Hamilton, 4th Duke of Hamilton|Duke of Hamilton]], a major supporter of the scheme, planned to import slaves "to be worked to death" at local [[Gold mining|gold mines]] in the region after a Scottish colony had been established in Panama.<ref>{{Cite web|first=Stephen|last=Mullen|title=The myth of Scottish slaves|url=https://sceptical.scot/2016/03/the-myth-of-scottish-slaves/|website=Sceptical Scot|date=4 March 2016|access-date=9 April 2023}}</ref>

The Scots' original aim of emulating the East India Company by breaking into the lucrative trading areas of the Indies and Africa was forgotten, and the highly ambitious Darien scheme was adopted by the company. Paterson later fell from grace when a subordinate [[embezzlement|embezzled]] funds from the company, took back Paterson's stock and expelled him from the Court of Directors; he was to have little real influence on events after this point.<ref name="Prebble, p.90"/> Historian Stephen Mullen referred to the scheme as a "mercantilist venture designed to improve personal fortunes and Scotland’s balance of trade through colonisation and exploitation".<ref>{{Cite web|first=Stephen|last=Mullen|title=The myth of Scottish slaves|url=https://sceptical.scot/2016/03/the-myth-of-scottish-slaves/|website=Sceptical Scot|date=4 March 2016|access-date=9 April 2023}}</ref>